It’s delivery time. Nine months had elapsed since the new administration led-by Prime Minister Dr. Abiy Ahmed assumed office. Each and every period of the conception of the promising days of Ethiopia passed through healthy macroeconomic situation—healthy and fit macroeconomic physique that promise faster growth and lasting all-round development has now been midwifed.
“Our country had been on the verge of collapse and the government’s coffer was almost empty in that we were unable to even cover public service wages,” as Prime Minister Dr. Abiy Ahmed told over 3,600 educators, assembled from all over the country last Saturday to discuss ways and means of maintaining education quality and other national issues.
Inflation spiraled high during the early days of the reform. And foreign currency reserve was critically scarce.
As a result, the country’s growth was put in jeopardy. The wheels of the construction of major mega projects, planned to be secured during the second Growth and Transformation Plan (GTP II) period (2014/15-2019/2020), had come to slow motion, if not pulled over at all.
Creditors had been funneling finance to the country’s mega projects but due to embezzlement of public fund, the constructions did not go to the desired level, dragging the country back to the quagmire of debt distress. “Annually, we were required to pay a debt of 400 million USD to international creditors,” the Premier explained to the educators. The government was facing with fierce challenge of a 20-billion Birr deficit during the last Ethiopian fiscal year.
Hence, the government was caught between two stools, one to press ahead with the reform actions and the second to find reliable means to overcome the financial hurdle.
On 18 October 2017, the Premier explained to parliament the fact that macroeconomic stability was ensured with ardent jobs carried out in short time. “We managed to keep inflation to 12 percent while pushing government’s forex reserve to over 334 percent.”
The new administration also championed in securing diplomatic success by dealing with creditors to convert commercial loans to concessional ones.
“Now with the standard of IMF, we managed to secure forex reserve which could last three months,” he told the educators.
The Premier also brought to attention the fact that the wheels of the mega projects set to faster motion, mentioning the recent launching of industrial parks and sugar projects.
It is to be noted that Adama Industrial Park, Jimma Industrial Park, Jimma Medical Center, Reb Irrigation Project and Omo Kuraz III Sugar Project entered operation phase recently—an indication that the monster is utterly beaten to death.
He also unveiled as the financial sector’s performance also starts to rise above the stagnation. The potentials of lone granting and lone collection have grown fast helping banks to obtain double-digit profits, as he said it outright.
The government has been applying various mechanisms to flicker hope of economic transformation. In addition to the diplomatic means, the milestone achievements in garnering supports of the diaspora community has brought tangible achievement economically.
Remittance blockade that was applied to crush the repressive past administration to its heels added fuel to the forex crunch the country faced. To the surprise of all, the Diaspora Community has continued being pillar of the forex earning of the country, not only in sending remittance through formal channels but in keeping its promise of one dollar a day contrbution.
International creditors also opened their doors to the country while the country takes a path of speedy growth through properly pouring finance on key projects. With the trade law which will see improvement soon, and the country’s commitment to make the business climate more favorable, it is beyond doubt that the macroeconomic body will grow fast and healthy to award citizens a modest living.
Herald January 11/2019
BY WORKU BELACHEW
